Winner, loser, or innocent victim? Has renewable energy performed as expected?

Abstract

This study provides an evaluation of the performance of five renewable energy technologies used to generate electricity: biomass, geothermal, solar photovoltaics, solar thermal, and wind. We compared the actual performance of these technologies against stated projections that helped shape public policy goals over the last three decades. Our findings document a significant difference between the success of renewable technologies in penetrating the U.S. electricity generation market and in meeting cost-related goals, when compared with historic projections. In general, renewable technologies have failed to meet expectations with respect to market penetration. They have succeeded, however, in meeting or exceeding expectations with respect to their cost. To a significant degree, the difference in performance in meeting projections of penetration and cost stem from the declining price of conventional generation, which constitutes a moving baseline against which renewable technologies have had to compete.

Empirical challenges in the use of learning curves for assessing the economic prospects of renewable energy technologies

“…In this way one obtains an endogenous representation of technical change, and the implementation of learning curves in large-scale energy system models connects future cost developments to current investments in new technology in a way that the cost of the new technology will depend on earlier energy system developments. 2 The introduction of learning in energy models may have important implications for the timing and the cost of environmental policies. High learning rates for new vs. old technologies support early, upfront investment in new technologies to reap the economic benefits of technological learning, and they also imply that the gross costs of climate policy may be comparatively low (e.g., [9]).…”

“…For instance, McDonald and Schrattenholzer [11] show that the learning rate for wind turbines range between 8% and 18% depending on study, and similar differences exist for other technologies. 3 Given this, the recent research on moving away from deterministic learning estimates to the introduction of uncertainties in the ARTICLE IN PRESS 1 Still, McVeigh et al [2] show that even though the costs of renewable energy technologies in the past have fallen far beyond expectations, they have often failed to meet expectations with respect to market penetration. This suggests that the costs of the traditional power sources have fallen as well and apart from cost disadvantages there exist additional legislative and institutional obstacles to increased renewable energy diffusion.…”

“…This suggests that the costs of the traditional power sources have fallen as well and apart from cost disadvantages there exist additional legislative and institutional obstacles to increased renewable energy diffusion. 2 The energy system models that incorporate learning-by-doing for energy technologies typically have a bottomup structure, i.e., optimization models in which different technological options are explicitly specified. See, for instance, Messner [3], Mattsson and Wene [4], Kouvaritakis et al [5], Barreto and Kypreos [6], and the survey article by Berglund and So¨derholm [7].…”

“…Specifically, we can regress ln CC nt on a set of variables considered exogenous to ln CC nt , and then employ the fitted values from this first regression as instruments in place of ln CC nt in Eqs. (2) and (3). In this paper, we compare the results obtained by acknowledging endogeneity to those where simple OLS estimation procedures have been used.…”

Measuring the social value of nuclear energy using contingent valuation methodology

“…Therefore, eminent reduction of carbon emission can be achieved by changing a substantial fraction of US electricity generating capacity from fossil fuels to environmentally friendly energy sources. Consequently, nuclear became highlighted due to its distinguishable economic and environmental advantage over other energy resources including non-hydroelectric renewables (McVeigh et al, 2000). In the near future, nuclear is expected to be accepted as one of the promising alternatives which can achieve both energy security supply and prevention of climate change.…”